The issue in many cases is whether a homeowner is required to carry workmen's compensation insurance. The question is crucial because if a homeowner is required to carry workmen's compensation insurance but does not have a policy, and an employee is injured at work, the employee need not prove that the homeowner was negligent in order to recover damages. However, the Workmen's Compensation Act ("Act") includes a carve-out for homeowners who hire individuals to work on their homes. While not required to carry worker's compensation, insurance homeowners should consult with their insurance provider prior to the commencement of any home improvement project to ensure that their policy covers such work.

The case of Peters v. Michienzi, 385 Mass. 533 (1982), dealt with the construction of a vacation home. The homeowners in Peters were employers, however the Court stated that the homeowners were not employers as defined by the Act. The Act is clear, "[I]f an employer is required under the Workmen's Compensation Act to provide workmen's compensation insurance and fails to do so, the employer is liable in tort to an employee for injuries arising out of and in the course of the employment without proof that the employer was negligent. Peters, at 534-535, citing G.L. c.152, § 66, 67. However, the Court in Peters held that it was not the legislature's intent to include homeowners in the definition of employer. Specifically, the Court held that the Act did not encompass employers, in this case homeowners, not acting in their regular trade, business or occupation.

The significance of the Peters decision is that a homeowner who employs tradespeople to construct, renovate or repair their home need not carry workmen's compensation insurance. "Building a home for one's personal use is not a 'business' or "occupation" as those terms are commonly understood." Peters, at 536. "The exception for nonbusiness employment is so basic to the definition of 'employee' that it cannot be deprived of its force without drastically expanding the reach of the Act." Peters, at 539-540.

While the Peters decision clarifies the statutory exemption, that homeowners need not carry workmen's compensation insurance, it does not provide immunity from lawsuits filed by employees injured on the job. At this time, a worker who is injured while working at a residential home improvement project would need to prove the following: (1) there was a defect that a homeowner should have been aware of; or (2) that the homeowner exercised such control over the employee's actions that it caused the employee's injury.

The duty of reasonable care that a landowner has to all persons lawfully on the premises, includes an obligation to maintain his property in a reasonably safe condition in view of all the circumstances, including the likelihood of injury to others, the seriousness of the likelihood of injury to others, the seriousness of the injury, and burden of avoiding the risk. O'Sullivan v. Shaw, 431 Mass. 201 (2000). The cautious homeowner would operate under the presumption that courts would extend this language to cover those employed by a homeowner to construct, repair or renovate their home.

In summary, homeowners employing individuals to construct, repair or renovate their home need not carry workmen's compensation insurance. However, prior to the commencement of any work, homeowners should make sure that their current insurance policy covers the individuals that will be working on their home. If the homeowner's insurance policy does not cover persons working on their home, then self insurance would be an avenue that the homeowner must consider. Again, these issues should be discussed at length with the insurance provider. Furthermore, the prudent homeowner will inspect her home and property, prior to the beginning of the project, for any defects that could possibly lead to the injury of anyone. If any defects are present the homeowner must inform the worker of the potential danger. A homeowner not familiar with the techniques needed to complete his project should not direct workers as to how to perform their tasks. Additionally, a homeowner should seek references, inquire a out licenses and see if any complaints have been filed against the individuals they intend to hire to work on their home. Once the homeowner is comfortable that the individuals they hire are experienced in their respective trade and all relevant insurance coverage is in place, the job should begin.